Panel SA: I was perplexed by the case of Americanas, says 1st president of CVM

Roberto Teixeira da Costa, who was the first president of the CVM in the 1970s, says he was perplexed when he learned of the billionaire problem on Americanas’ balance sheet. He considers it too early to treat it as bad faith, leniency or lack of clarity in the rules. He says that accounting is a very complex subject and has a strong interpretative bias.

The economist also thinks it is too early to draw conclusions about the direction of the Lula government. His most recent book, published in 2021, “O Brasil tem Medo do Mundo? Ou o Mundo tem Medo do Brasil?” so many recent transformations. Ukraine, change of government and even Pelé were mentioned.

His new book, from 2021, addresses Brazil’s international isolation. How do you evaluate today, after the last events? My book “Is Brazil Afraid of the World? Or is the World Afraid of Brazil?” should be released in March or April in English.

It was interesting because the book came out a year and a half ago. Now, I practically had to revise the entire text, because in that period there were so many changes in the national and international scenario. The pandemic had consequences, I added comments about the War in Ukraine, and at least a few lines about Lula’s election and its repercussions on the international scene.

And the editors agreed when I asked to do an additional paragraph about Pele. It’s curious to talk about Pelé in the context of international relations, but on my travels around the world, his name was mentioned. Pelé was a fantastic door opener for Brazil.

And what was the weight of these modifications? The word unbelievable is something that has come back into my vocabulary frequently. The things that are happening surprise me on such a scale. Today, when people ask me if I think anything is possible, I think anything is possible. It is a succession of events, here and abroad, that leave me perplexed.

This week, we heard that Biden also had secret documents stored at home. Trump was hammered, and now Biden had it too. The Minister of Justice here leaves a draft at home of a possible project or the name you want to give to an intervention in the democratic system. It’s unbelievable that he thought of that and even more unbelievable that he kept this document at home.

And what about the international repercussions of this and the invasions in Brasília? We have to divide it into two parts. International support for Brazil was immense. Even Russia, which invaded Ukraine, showed its support, which also falls into the category of unbelievable.

Now, regardless of this event, the world wants Brazil to succeed. Why? In this troubled world we are living in, where alliances have been broken, with the search for leadership in the world, the hegemony dispute between China and the US, all this creates an environment of enormous uncertainty, in addition to the climate issue.

Returning to Brasilia, I think that the consequences of this, in the short term, are a great deal of external and internal support. Whether it will last depends on what lies ahead. About Bolsonaro, if, on the one hand, it would be good to bring him to the country, pass judgment, etc., on the other hand, I have strange feelings. I think the ideal thing is for Bolsonaro to stay out there. Our internal, economic, political and social agenda is of such a nature that his presence here will divert attention. Let’s keep discussing this, if you go to jail, if you don’t. Shouldn’t we be focused on solving the fiscal problem, economic growth, poverty and hunger that the president has been emphasizing?

On the other hand, passing an eraser over it doesn’t work either. It’s complex.

And what does it predict in the economy? I have steadfastly refused to pass judgment. They say a hundred days. I’m only going to make judgments of the Lula government in six months. We have to give it time. I continue to give confidence to President Lula. I think you have the right ideas. Now, the execution is the problem.

What is your opinion on this case of the BRL 20 billion problem on Americanas’ balance sheet? In the Enron case, accounting fraud was discovered, the stock dropped to US$ 1 and the company’s president went to jail. Auditor Arthur Andersen broke down and left the map. In the case of the Americanas, I was, like most of the market, perplexed. It is a company that has been part of our daily lives since childhood. In no way do I impute bad faith.

In the early 2000s, I was invited to become a member of the IASB (International Accounting Standards Board). The idea was to have a system of accounting standards that was universal. Accounting, if we are not initiated, seems like a very simple thing, it is debit, credit. This time at the IASB showed me that accounting is extremely complex, because it has an interpretative bias that we are not aware of. Was there bad faith on the part of the people who managed the company and did not correctly account for this supplier issue, or was it done to inflate results? I’m not making any claims.

One of the positive things about capitalism is employee profit sharing, the so-called stock options. [opção de compra de ações]. In the Enron case, one of the main reasons was that shareholders inflated earnings because they had stock options and wanted the stock to rise.

Returning to the case of Americanas, I think we have to wait a bit to really understand what happened. Whether it was bad faith or just leniency or tolerance, or the accounting rules were not clear enough. How does a company like PwC swallow such a toad? These are things that we have to give time to time.

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He worked at institutions such as Banco de Investimento do Brasil and Unibanco and at the installation of the CVM (Comissão de Valores Mobiliários), of which he was the first president until 1979. He is also the founder of Cebri (Brazilian Center for International Relations), member of the board of directors of Interamerican Dialogue of Washington, among other posts.